Frankfurt (May 15) Global stocks slipped lower Wednesday, setting up Wall Street for modest opening bell declines, even as investors reacted to a softening of rhetoric from President Donald Trump in the U.S. China trade war and suggestions that talks could resume in the coming weeks.

Markets were also soothed by weaker-than-expected economic data from China, where retail sales, industrial output and fixed asset investment for the month of April all fell short of analysts' forecasts, suggesting not only slowing growth in the world's second-largest economy but also a weakening bargaining position in the trade stand-off with Washington.

A further signal of potential co-operation from Beijing, which retaliated with tariffs on $60 billion worth of U.S. imports on Monday following Trump's move to apply levies to $200 billion worth of China-made goods last week, came from the currency markets, where the Chinese yuan was fixed at a higher-than-expected level against the dollar, a move some analysts said was an attempt to both discourse short-sellers and signal to U.S. officials that it won't use the yuan as a weapon on the ongoing trade dispute.

With President Trump describing that dispute as "a little squabble" to reporters outside the White House yesterday, as well as confirmation from the U.S. Treasury that Secretary Steve Mnuchin will soon travel to Beijing to resume trade talks, markets were happy to add risk following both last night's rally on Wall Street and the three-and-a-half month lows that were hit in Asia markets yesterday.

Japan's Nikkei 225 was the first to respond, rising for the first day in six to close 0.58% higher at 21,186.56 points, while China's Shanghai Composite rose 1.9% on hopes of faster stimulus and deeper tax cuts following the weakest retail sales in sixteen years.

Early indications from U.S. equity futures suggest modestly gains at the start of the trading day on Wall Street, as well, with contracts tied to the Dow Jones Industrial Average indicating a 7 point dip at the opening bell while those linked to the S&P 500 are guiding to a 2 point pullback for the broader benchmark.

European stocks edged higher at the start of trading in Frankfurt, but quickly gave back gains with the region-wide Stoxx 600 falling 0.4% and Germany's DAX performance index retreating 0.46% after first quarter GDP growth was pegged at a faster-than-expected 0.7% clip, suggesting solid underlying strength in Europe's biggest economy.

However, ongoing concerns over Italy's budget deficit after Deputy Prime Minister Matteo Salvini said his country was ready to break EU budget and debt limit rules in order to stimulate growth in the flagging Italian economy, the third largest in Europe.

Away from equities, the U.S. dollar index added to recent gains with a modest 0.05% advance to edge the greenback higher against a basket of global currencies, while benchmark U.S. Treasury bond yields were little-changed at 2.414% in overnight Asia trade.

Global oil prices were modestly weaker in the overnight session, however, as traders reacted to a bigger-than-expected build of 8.9 million barrels in U.S. crude inventories yesterday, according to data from the American Petroleum Institute, although declines were held in check by ongoing tensions in and around the Gulf region, where Saudi Arabia has alleged a series of attacks on its tankers traveling through the Strait of Hormuz.

Prices were also impacted by the International Energy Agency's monthly oil market report, which trimmed its 2019 forecast for global crude demand by 90,000 barrels per day to 1.3 million.

Brent crude contracts for July delivery, the global benchmark for oil prices, were marked 50 cents lower from their Tuesday close in New York and changing hands at $70.75 per barrel while WTI contracts for June delivery were seen 68 cents lower at $61.10 per barrel.